If you were first hired by the federal government before January 1, 1984, you might be one of the fortunate “grandfathered” employees still covered under the Civil Service Retirement System (CSRS).
Established on August 1, 1920—long before Social Security existed—CSRS remains a defined‑benefit plan . While the majority of today’s workforce is enrolled in the Federal Employees Retirement System (FERS), understanding CSRS’s unique advantages can help you plan more effectively for retirement.
What makes CSRS different?
Unlike FERS, which combines a pension, Social Security, and the Thrift Savings Plan (TSP), CSRS relies heavily on your basic annuity. Employees contribute 7 %–8 % of their salary to the plan, and their agency matches that amount . CSRS participants typically do not pay Social Security (OASDI) taxes, but they do pay the Medicare tax .
You can boost your retirement income by contributing up to 10 % of your pay to a voluntary contribution account . Alternatively, you may choose to put money into the TSP; the government won’t match those contributions under CSRS , but the contributions are tax‑deferred. Many CSRS employees use a combination of voluntary contributions and TSP to grow their nest egg.
Eligibility and retirement options
CSRS offers five categories of benefits: optional retirement, special/early optional, special provision retirement (for law‑enforcement officers, firefighters, etc.), discontinued service, and disability. The rules for each category differ, but in every case your eligibility is determined by age, years of creditable service and the type of retirement you choose. Credit for unused sick leave and distinctions between civilian and military service can affect your total service time, so it’s wise to consult a Federal Benefits counsellor to ensure you’re receiving all the credit you’re entitled to.
How your pension is calculated
The CSRS pension formula is straightforward and generous. Your basic annuity is based on your high‑3 average salary and your total years of service. The longer you work, the higher your benefit:
- First five years: 1.5 % of your high‑3 average salary for each year .
- Second five years: add 1.75 % of your high‑3 average salary for each year .
- All years beyond ten: add 2 % of your high‑3 average salary for each year .
The maximum you can receive is 80 % of your high‑3 average salary (plus credit for unused sick leave) . Only employees with more than 41 years and 11 months of creditable service typically reach this cap. Your annuity can also be reduced if you retire before age 55, fail to make certain deposits or redeposits, or elect a survivor annuity .
Why you need personalised guidance
Every CSRS situation is unique. Your retirement date, unused sick leave, voluntary contributions and possible military credit all influence your final benefit. A Federal Benefits counsellor can review your specific circumstances and calculate your projected annuity. They can also help you decide whether voluntary contributions or additional TSP investments make sense for your goals.
Next steps: Make CSRS work for you
If you’re one of the thousands still covered under CSRS, make sure you’re taking full advantage of the programme. Our trained, caring professionals will prepare a Comprehensive Annual Benefits Report (CABS) tailored to your situation. This report combines your CSRS annuity, Social Security estimates, TSP contributions and any other assets to give you a clear picture of your retirement income and identify strategies to maximise it. There’s no cost or obligation—it’s our way of helping federal employees retire on their terms.
Ready to see how much you can have—and whether you can have more? Make a free appointment today and let us help you build the retirement you deserve.
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